News

California greenhouse gas rules face major court test

By Howard Mintz hmintz@mercurynews.com

Posted:
10/15/2012 07:21:02 AM PDT

Updated:
10/15/2012 07:24:44 AM PDT

Having fended off a challenge to groundbreaking emissions standards for new cars, California now finds itself in a legal tug-of-war to preserve some of its unprecedented regulations to reduce greenhouse gas emissions of fuels.

The 9th U.S. Circuit Court of Appeals on Tuesday will hear arguments in a legal challenge to the 2006 regulations, which a Fresno federal judge last year struck down as unconstitutional. The judge sided with an array of gas, trucking and farming industry interests aligned against the complex effort to curtail the carbon footprint of transportation fuels.

Legal experts say the appeal could crucially test how far a state can go with such broad greenhouse gas regulations.

"Any comprehensive plan is going to have to confront this issue," said Daniel Farber, co-director of UC Berkeley's environmental law clinic. "A negative decision in this case could pose a barrier to aggressive state efforts to address climate change."

A three-judge panel will consider the state's argument that its rules do not conflict with federal law and are important for states such as California that are aggressive about environmental regulation. The California Air Resources Board rules favor producers of gas, diesel fuel and ethanol that manage to generate lower greenhouse gas emissions.

The state's goal, originally pushed by former Gov. Arnold Schwarzenegger, called for reducing greenhouse gas emissions to 1990 levels by 2020.

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Seven other states are siding with California, arguing the stakes are high for others hoping to adopt the same type of regulations. They say the standards "are an important means of reducing greenhouse gas emissions that contribute to climate change."

California's related effort to regulate emissions from new cars sold in the state survived a similar legal challenge, but the battle over the low carbon fuel standard has been on a bumpier ride in the courts.

U.S. District Judge Lawrence O'Neill found the California rules violate the federal commerce clause because they reach across state borders and discriminate against out-of-state businesses, favoring, for example, California corn ethanol over corn ethanol produced in the Midwest.

The low carbon standard, the judge warned, "impermissibly treads into the province and powers of our federal government."

In fact, nine states, from Nebraska to Ohio, oppose California in the 9th Circuit, saying its rules "penalize" their ethanol producers.

Environmental groups and California Attorney General Kamala Harris defend the law, saying Congress has given the green light for California to enforce such regulations. And they say California has the right to reject fuels that are produced in a climate-threatening way.

"The kinds of arguments the industry is making, if accepted by the court, would scale back the states' historic role," said Sean Donahue, a lawyer for the Environmental Defense Fund.

The attorney general urged the 9th Circuit to uphold the rules, saying they are "intended to create incentives for low-carbon alternatives to petroleum, not the protectionist purpose of benefiting California-produced fuels."

The fuel industry insists the California regulations go too far. And it argues the strict regulations will hit consumers hard because of the cost of limiting fuel production options.

The rules will contribute to higher prices in California, said Rich Moskowitz, general counsel for the American Fuel and Petrochemical Manufacturers association. And he predicts the court case will have broad implications for similar state regulations.

"It certainly will have an impact beyond California," he said. "Other states are looking at this litigation to see whether the proposed low carbon fuel standards are indeed constitutional."

Howard Mintz covers legal affairs. Contact him at 408-286-0236. Follow him at Twitter.com/hmintz.